Mike Duffy is paying back the thousands of dollars he claimed for housing expenses after admitting he made a mistake, but the Senate committee auditing his spending has not decided to halt its investigation.

The Prince Edward Island senator blinked on Friday after weeks of refusing to address the controversy over where he has his principal residence – PEI or Ottawa. Two weeks ago, he went through the kitchen of a Halifax hotel to avoid talking to the media.

He said although he believes he owes nothing, he is reimbursing Ottawa because the controversy has become a distraction from his work as a senator.

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"Rather than let this issue drag on, my wife and I have decided that the allowance associated with my house in Ottawa will be repaid," the 66-year-old senator said in a statement on Friday.

And after weeks of saying little about Mr. Duffy's situation, the Prime Minister's Office came to his defence: "The government has no doubt whatsoever about Senator Duffy's qualification to represent PEI in the Senate," a PMO official said.

Senator Marjory LeBreton, government leader in the Senate, offered her support, too, saying Mr. Duffy "maintains a residence in Prince Edward Island and has deep ties to the province."

But the head of the committee that ordered audits of the expenses of Mr. Duffy and three other Senators said no decision has been made about stopping the investigation of Mr. Duffy.

The Senate committee on internal economy has not heard "formally" from Mr. Duffy about his decision, said committee chair David Tkachuk of Saskatchewan.

"We have committed to ensuring that all expenses are appropriate, that the rules governing expenses are appropriate and to report back to the public on these matters," he wrote in an e-mail to The Globe and Mail.

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The committee will meet this week to discuss the matter.

Mr. Duffy says his heart is in PEI but his job is in Ontario. He said he claimed the housing allowance – $30 a day – in good faith, but that the forms he had to fill out were confusing. He believed he was "in compliance with the rules."

"Now it turns out I may have been mistaken," Mr. Duffy said in his statement. He does not say how much he will have to repay, but he is reported to have claimed about $30,000 since September, 2010. He was appointed to the Senate in 2009.

In an interview with CTV Atlantic, Mr. Duffy said, "I don't believe I owe the money." But he said he wants the issue to go away and hopes the housing allowance forms will be made clearer so that other senators will not be "caught in this problem."

Mr. Duffy, who was born and raised in PEI, has a cottage in Cavendish. He claimed this as his primary residence and called his home in Kanata, a suburb of Ottawa, which he bought well before being appointed to the upper chamber, his secondary residence.

In his statement, he said he pays property taxes in PEI and argues the Senate rules on housing allowances aren't clear.

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Most importantly, he says, his "heart is here," in PEI.

But not his health care. One contentious issue about his residency concerned the fact that Mr. Duffy did not have a PEI health card. Rather, he paid taxes in Ontario so that he could keep his OHIP card.

He had heart surgery in 2006, when he was working as a political broadcaster in Ottawa. He wanted to continue his care with his team of specialists at the University of Ottawa Heart Institute after he was appointed to the Senate.

PEI does not have a heart institute – and patients go to Halifax or Saint John, N.B.

Although,PEI has agreements with the other provinces for care, Mr. Duffy was worried the province would not allow him to continue seeing his Ottawa doctors. Recently, he applied for a PEI health card.

"I want there to be no doubt that I'm serving Islanders first," he said.

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